Magic Still Owe Arenas $38 Million

The Magic are paying Gilbert Arenas until 2016 after the club and the former guard mutually agreed to effectively restructure the remainder of his mammoth $111-million contract when he was amnestied two years ago, NBA sources told the Sentinel.

Under the league’s one-time amnesty provision, Arenas’ salary does not count against the Magic’s salary cap and luxury tax, meaning it will not affect their future free-agent plans.

The Magic used the “stretch provision” under the new CBA to spread out amnesty payments to Arenas beginning in 2012-13 and over the remainder of the contract – in this case, over a total of four seasons. It’s a move beneficial to the team in that it’s easier on the overall budget.

In a 2010 trade that sent Rashard Lewis to Washington for Arenas, the Magic were believed to have inherited about $62 million of the six-year, $111-million contract that Arenas signed with the Wizards in 2008.